The Ninth Circuit Court of Appeals recently upheld the decision of a district court in Hawaii concluding that a student’s parents must be reimbursed for the continued placement of their son, Sam K., in a private school due to the Hawaii Department of Education’s (DOE) failure to convene an Individualized Education Program (IEP) prior to the start of the school year. In Sam K. v. Hawaii Dep’t of Educ., (9th Cir., June 5, 2015) 2015 U.S. App. Lexis 9398, the Ninth Circuit held that the DOE “tacitly consented” to a student’s private school enrollment by failing to convene an IEP meeting and make an offer of a free, appropriate public education (FAPE) prior to the beginning of the next school year. This decision is applicable to school districts and other local educational agencies responsible for the offer and provision of FAPE for special education students.

In Sam K., the student was placed in a private school by his parents and remained there for several years pursuant to a settlement agreement between his parents and the DOE. The settlement agreement provided that the DOE would fund the prior year’s placement and two prospective years of placement, and the DOE would convene an IEP meeting prior to the end of the 2009-2010 school year, which was the last year of the placement funding pursuant to the settlement agreement.

The DOE convened several IEP meetings during the summer of 2010 through January 2011. However, a written offer of FAPE was not provided to the parents until January 2011. During this time, the student remained at the private school placement, even after the DOE finally made an offer of FAPE in January 2011 for a DOE program. The parents ultimately filed for due process in October 2011 before an administrative law judge (ALJ) to contest the DOE’s placement offer.

While the ALJ found that the parents established that the private school placement was appropriate for the purpose of reimbursement, the ALJ determined that the placement in the private school was a unilateral placement and subject to Hawaii’s 180-day statute of limitations regarding unilateral placements. The parents were precluded from reimbursement because their complaint was untimely, since it was not filed within 180 days of the offer of FAPE. The parents appealed to the United States District Court, which reversed the ALJ’s decision, and agreed that the parents had met their burden of proving that the private school placement was appropriate and thus required the DOE to reimburse the parents for the cost of tuition.

In making its determination, the district court relied on a previous decision in D.C. v. Dept. of Educ. (D. Haw. 2008) 550 F. Supp. 2d 1238, which held that a determination by a hearing officer that a private placement was appropriate (and that the DOE’s offer of placement was not) effectively amounted to a bilateral agreement between the parties regarding the private placement. The district court in Sam K. used this reasoning to find that the placement was not a unilateral placement. Rather, the court held that it was a continuation of a bilateral placement because: i) the student had been placed in the private placement for numerous years; ii) the settlement agreement provided for DOE funding of the private placement for three years and did not specify that there would be a change of placement; and iii) the DOE failed to offer an IEP prior to the beginning of the 2010-2011 school year. As the district court found that the placement was bilateral, it held that the 180-day statute of limitations did not apply. This meant that the parents’ complaint was timely and they were entitled to reimbursement.

The DOE appealed to the Ninth Circuit, which affirmed the lower court’s decision, holding that the DOE “tacitly consented” to the student’s enrollment in the private school placement by failing to offer an alternative placement prior to the start of the 2010-2011 school year. The appellate court found that the tacit consent created a bilateral agreement to the private school placement making the 180-day statute inapplicable, allowing the parents to obtain reimbursement for the private school tuition for the 2010-2011 school year.

This case may be applicable in California, even though California does not have a 180-day statute of limitations on recovery of the costs of a unilateral placement. Namely, regardless of such a statute, there is now precedent indicating that in some circumstances a school district’s failure to convene an IEP team meeting and make an offer of FAPE might allow for the continuation of a private placement that was previously agreed to only as part of a settlement. The Sam K. decision did not determine how the doctrine of “stay put” may have affected the decision, especially if the settlement agreement had provided that the private placement would not be “stay put” and had instead designated an alternative DOE program. However, it also serves as a good reminder that pursuant to the Code of Federal Regulations, school districts must have an offer of placement in place prior to the beginning of the school year. (34 C.F.R. section 300.323.)

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

The United States Supreme Court recently ruled that an employer may not use a seemingly neutral policy or practice to discriminate against an employee or applicant in the free exercise of religion. In Equal Employment Opportunity Commission v. Abercrombie & Fitch Stores, Inc. (June 1, 2015) 2015 U.S. Lexis 3718, (Abercrombie & Fitch), the Court found that even a neutral policy may cause intentional discrimination against an employee or applicant when used to deny employment or employment rights because of the employee’s need for an accommodation due to his or her religious beliefs.

Samantha Elauf, a practicing Muslim, applied for a position with Abercrombie & Fitch Stores. She was interviewed by the store’s assistant manager and was given a rating qualifying her for hire. However, Abercrombie & Fitch has a “Look Policy” governing employee dress. The policy prohibits the wearing of “caps.” During her interview Ms. Elauf wore a headscarf and the assistant manager was concerned it would conflict with the store’s policy. Upon inquiry, the district manager informed the assistant manager that the headscarf would in fact violate the policy, as would any headwear, and directed the assistant manager not to hire Ms. Elauf. The Equal Employment Opportunity Commission (EEOC) filed suit on behalf of Ms. Elauf alleging a violation of Title VII of the Civil Rights Act of 1964 (Title VII).

Title VII prohibits two categories of employment practices: disparate treatment (or intentional discrimination) and disparate impact (or unintentional discrimination). Intentional discrimination is found when an employer fails or refuses to hire or discharges any individual because of that individual’s race, color, religion, sex, or national origin. Intentional discrimination can also be found where an employer discriminates against an individual with respect to compensation, terms, conditions, or privileges of employment. Challenges based on a failure to accommodate, as in the Abercrombie & Fitch case, can be brought as intentional discrimination claims. In Abercrombie & Fitch, the Supreme Court found that the company had a neutral policy against “caps” because the policy forbid the wearing of any kind of cap, religious or non-religious, and the policy was neutrally applied, as it was applied to all employees regardless of religion. However, the Court found that the store had an obligation to accommodate Ms. Elauf’s desire to wear a headscarf and therefore Abercrombie & Fitch had intentionally discriminated against Ms. Elauf by failing to provide an accommodation for her religious practice.

The Abercrombie & Fitch decision reminds employers to be cautious when denying employment or employment opportunities based on practices or policies that may impact an employee’s or applicant’s exercise of religion. A neutral policy applied in a neutral manner may not withstand judicial scrutiny if the policy discriminates against an employee or applicant based on his or her religious practices. Employers have a duty to accommodate religious practices, unless the employer can demonstrate it would cause undue hardship on the conduct of the employer’s business.

If you have any questions regarding this decision, or other questions regarding employer accommodations for religious practices, please contact one of ournine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

The Public Employment Relations Board (PERB) recently upheld the termination of a teacher with a history of misconduct despite the fact that the teacher established a causal nexus between his legally protected activities and his termination.

In Jurupa Unified School District (2015) PERB Decision No. 2420, PERB rejected allegations by a teacher that was terminated in retaliation for filing an unfair practice charge. The teacher filed an unfair practice charge on April 30, 2012 alleging that the District violated the Educational Employment Relations Act (EERA) by denying his request for personal necessity leave to attend a court hearing. A week later, on May 7, 2012, the District initiated termination proceedings against the teacher. On May 29, 2012, the teacher amended the initial unfair practice charge to allege that the District violated the EERA by initiating termination proceedings against him in retaliation for filing his initial unfair practice charge.

PERB found that the teacher demonstrated a causal nexus between his protected activity of filing his initial charge and his termination. Specifically, PERB held that the teacher established the four factors necessary to prove a preliminary case of retaliation: (1) he engaged in protected conduct; (2) the relevant decision-makers at the District had knowledge of his activity; (3) the District took adverse action against his employment; and (4) the District’s action was motivated, at least in part, by his protected activity.

Despite this holding, PERB rejected the unfair practice charge. PERB held that when the burden shifted to the District to disprove the teacher’s claims, the District had other legitimate, non-discriminatory reasons for terminating the teacher. These reasons included the District’s receipt of complaints about the teacher’s conduct, which pre-dated his protected activities and included disrespectful treatment of his students, and evidence that the teacher had been investigated on three previous occasions by the District for alleged misconduct prior to his filing of the initial charge. PERB concluded that because the teacher had “repeated instances of misconduct, both before and after his protected conduct” the District satisfied its burden of proving that it would have taken the same actions even if the teacher had not filed the initial charge.

This case serves as a reminder of the factors that PERB will consider in determining whether an employment action constitutes an unfair practice. It also demonstrates the importance of timely documenting instances of employee misconduct to establish a legitimate, nonretaliatory basis for any disciplinary action.

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

Despite a recent appellate court decision that affirmed the validity of “lease-leaseback” contracts for school districts to build facilities under Education Code §§17400, et seq., a new appellate court decision from a different appellate court district has allowed a lawsuit to proceed against a particular lease-leaseback arrangement that was similar to many in use by school districts in the State. In a portion of the decision relevant to all public agencies, the court also concluded that a civil cause of action for conflict of interest under Government Code section 1090, et seq., can be brought to seek invalidation of a contract where the conflict involves an outside consultant, rather than a public agency employee or officer. The court’s decision is not yet final, and may be subject to further review.

Lease-Leaseback

Last year, the Fourth District appellate court in Los Alamitos Unified School District v. Howard Contracting, Inc. (2014) 229 Cal.App.4th 1222, upheld a school district’s use of lease-leaseback under Education Code section 17406 to build facilities and confirmed that competitive bidding was not required when using that authority. (See Client News Brief No. 62, September 2014.)

This week, in Davis v. Fresno Unified School District (June 1, 2015) case no. F068477 (5th App. Dist.), the court agreed with Los Alamitos that lease-leaseback can comply with the law, and does not require competitive bidding. However, the court allowed a lawsuit, currently only at the pleading stage, to move forward challenging a specific lease-leaseback arrangement. The case was sent back to the trial court for further proceedings and, as a result, the ultimate outcome of this case may be decided on appeal or after a trial on the specific issues. For these reasons, it is too soon to say to what extent Davis may impact other school districts in their specific lease-leaseback arrangements. The case does not directly address lease-leaseback for other public agencies.

While it is premature to say that Davis has changed or will change the landscape of lease-leaseback, the court’s decision calls into question a number of aspects of many school district lease-leaseback agreements. A primary concern regarding the lease-leaseback agreement addressed by the court is that the agreement functioned more like a construction contract than a “true” lease. The court addressed a number of alleged characteristics of the school district’s specific contract documents, and concluded that the plaintiff might be able to establish at trial that the agreement was not a “true” lease under the lease-leaseback statutes. The court opined that in order to be a lease, the statute requires the district to occupy and have use of the site for some period of time while the lease and leaseback (sublease) were in effect. The court also opined that a lease-leaseback under Section 17406 must function as a financing vehicle for the school district, although the court rejected the notion that a school district must lack access to facility funding in order to use lease-leaseback. The court’s conclusions are debatable, and may yet be subject to further judicial review.

Conflict of Interest

In addition to the lease-leaseback issue, the Court addressed conflict of interest in a manner that is applicable to all local agencies. The court allowed further legal action on a claim that the contractor, as a pre-construction consultant to the school district, participated in the making of a contract in which it subsequently became financially interested, and thus potentially violated conflict of interest laws. The plaintiff alleged that the contractor had a conflict of interest because it developed the plans and specifications for the project, and simultaneously acted in its role as a government agency consultant to participate in making the overall lease-leaseback contract, which was a substantial financial benefit to the contractor. While the court acknowledged prior case law holding that an outside consultant cannot be criminally prosecuted for an alleged conflict of interest violation under Government Code section 1090, the court left open the possibility that the consultant might be found to have committed a violation that can be pursued in a civil lawsuit. Such a lawsuit could seek to invalidate the contract in question. This opens the door to potential scrutiny of outside consultants in a variety of contexts beyond construction. The court did, however, find that the Political Reform Act (Gov. Code §§ 87100, et seq.) does not apply to an outside corporation offering consulting services.

Lozano Smith will be monitoring this case closely and will report on any significant developments. Because of the scrutiny of the lease-leaseback authority that will likely follow the Davis case, and may continue until the case is finally resolved, school districts may wish to work particularly closely with their legal counsel on lease-leaseback issues and agreements. Similarly, for all public agencies, care should be taken when considering issuing contracts to consultants who have previously advised the agency on a related matter.

If you have any questions regarding this case or lease-leaseback agreements that school districts may have in place or are considering, please contact one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.